The ulterior motives behind calls to raise the H-1B cap

Corporate abuse of the H-1B program is one of my favorite soapboxes, and now …

We've been doing H-1B posts at Ars for as long as the site has been around, and it's a subject that never fails to spark controversy. Although I personally have posted on the topic many times before, my position on tech industry abuse of H1-Bs and the program's relationship to America's declining tech dominance was most recently laid out in this post. Below, I'll briefly summarize my position on the program, a position that I've developed from real-life observation of friends and acquaintances in Silicon Valley and in Boston who have been victimized by corporate abuse of the program. These friends and acquaintances include both overworked/underpaid foreign workers and out-of-work American programmers.

Most Americans aren't too familiar with the way the H-1B program works. In brief, American companies can use the H-1B program to bring in a skilled foreign worker to work in a specific job, usually in the science and technology sector. It's important to note that foreigner cannot apply for an H-1B on his own, but rather his future employer applies for the visa on his behalf after having extended him a job offer. If the application is approved, the foreigner can come over and work for up to three years before having to get the visa renewed and for up to six years total before the visa expires completely. Because the H-1B visa is a non-immigrant visa, the H-1B employee must leave the country the minute he either finds himself without work or his visa expires.

The critical point here is that the balance of power in this relationship is entirely skewed toward the employer. If the employer fires the foreign worker, then the worker has to leave the country. Or, if the employer doesn't renew the worker's visa application after three years, then the worker has to leave the country. Finally, the worker will definitely have to leave the country after six years when the H-1B visa expires... unless the employer has been sponsoring him for a green card (i.e., an immigrant visa) and he's now eligible for it.

The upshot of all this is that the foreign worker is basically stuck with the sponsoring employer if he or she wants to stay in the country and/or get a green card. This is a situation that's obviously ripe for abuse, and tech companies have been the most notorious abusers. Companies give H-1B workers much lower wages and benefits than Americans doing the same jobs, because the H-1B workers can't just up and quit. It's a form of indentured servitude that not only exploits of H-1B workers themselves, but it harms Americans by artificially reducing American competitiveness in the labor market. Why hire an American to do a job that you can bring in an H-1B worker to do for much cheaper?

These kinds of profit-motivated considerations are behind calls by tech industry luminaries like Intel CEO Craig Barrett and Microsoft's Bill Gates to increase the number of H-1Bs allowed into the country. Never mind the fact that there are over 100,000 unemployed American programmers out there looking for work. The tech industry perpetuates the myth of a massive IT labor shortage so that they can keep the cheap indentured servant labor coming in from overseas.

CNET is running a really great editorial by University of California-Davis CS professor Norm Matloff, a man who has dedicated a lot of energy to debunking the IT labor shortage myth and exposing the ulterior motives of those who want to increase the cap on H1-Bs. The editorial illuminates the many ways that abuses of the H-1B system harm America's short-term and long-term competitiveness in science and technology.

In the late 1990s, the computer industry claimed a desperate labor shortage. No independent study ever confirmed that shortage, but the hidden agenda behind the shrill shortage claims was to push Congress to increase the yearly cap on the H-1B work visa program, which enabled industry to import cut-rate engineers from abroad. Government data show, for instance, that Intel, which claims that its H-1Bs have master's degrees and Ph.D.s, pays them far less than the national medians for engineers with these degrees.

University computer science departments used the "labor shortage" claims to get more faculty, more doctoral students, and more research dollars from Congress and industry. Since research funding and Ph.D. production are key to prestige in universities, the claims of a labor shortage were manna from Heaven, and a number of prominent academics rushed to publicly support the industry's push to expand the H-1B program to remedy the "labor shortage."

Matloff also rips CNET for uncritically reproducing the claims of people like Barrett and Gates. The whole editorial is worth a read, as is this report linked off of the professor's homepage. The report goes into a lot more detail than the editorial, and it contains a plenty of hard data to back up the Matloff's claims. I highly recommend reading at least the first four pages of the PDF, especially if you plan to fire up the flamethrower in the discussion thread. There's enough in there to at least give you food for thought, if it doesn't get you hopping mad.

Finally, I should note that neither I nor the Matloff (as near as I can tell) are calling for the abolition of the H-1B program and/or the expulsion of foreign science and technology workers. That would be stupid, and it would hurt American technology leadership in its own way. Rather, the point is to reform the program to where it shifts the balance of power in favor of the workers themselves, both foreign and American.